How Software is Eating the World and Reprogramming Democracy

Jaime Gómez Ramírez at Open Mind: “Democracy, the government of the majority typically through elected representatives, is undergoing a major crisis. Human societies have experimented with democracy since at least the fifth century BC in the polis of Athens. Whether democracy is scalable is an open question that could help understand the current mistrust in democratic institutions and the rise of populism. The majority rule is a powerful narrative that is fed every few years with elections. In Against elections, the cultural historian Van Reybrouck claims that elections were never meant to make democracy possible, rather the opposite, it was a tool designed for those in power to prevent “the rule of the mob”. Elections created a new elite and power remained in the hands of a minority, but this time endowed with democratic legitimacy….

The 2008 financial crisis have changed the perception of, the once taken for granted, complementary nature of democracy and capitalism. The belief that capitalism and democracy go hand by hand is not credible anymore. The concept of nation is a fiction in need of a continuous stock of intergenerational believers. The nation state successfully assimilated heterogeneous groups of people under a common language and shared cultural values. But this seems today a rather fragile foundation to resist the centrifugal forces that financial capitalism impinges upon the social fabric.

Nation states will not collapse over night, but they are an industrial era device in a digital world. To do not fall into obsolescence they will need to change their operative system. Since the venture capitalist Marc Andreessen coined the phrase “software is eating the world” the logic of financial capitalism has accelerated this trend. Five software companies: Facebook, Apple, Amazon, Netflix and Google parent Alphabet (FANG) equal more than 10 per cent percent of the S&P 500 cap. Todays dominant industries in entertainment, retail, telecom, marketing companies and others are software companies. Software is also taking a bigger share in industries that traditionally exist in the physical space like automakers and energy. Education and health care have shown more resistance to software-based entrepreneurial change but a very profound transformation is underway. This is already visible with the growing popularity of MOOCs and personalized health monitoring systems.

Software-based business not only have up trending market share but more importantly, software can reprogram the world. The internet of things will allow to have full connectivity of smart devices in an economy with massive deflationary costs in computing. Computing might even become free. This has profound consequences for business, industry and most importantly, for how citizens want to organize society and governance.

The most promising technological innovation in years is the blockchain technology, an encrypted and distributed ledger system. Blockchain is an universal and freely accessible repository of documents including property and insurance contracts, publicly auditable, and resistant to special group interests manipulation and corruption. New kinds of governance models and services could be tested and implemented using the blockchain. The time is ripe for fundamental software-based transformation in governance. Democracy and free society will ignore this at its own peril…(More)”.